Claim statistics
The year 2020 has proven that the road ahead isn’t always perfectly mapped out. The Momentum Life Insurance 2020 Risk Summit showed us that now, more than ever, we must partner with people who can navigate through an unpredictable life insurance landscape… specialists who bring conviction, clarity and certainty to the journey, those who are not afraid of change and who understand risk.
Some interesting statistics
Having paid out claims in excess of R19 billion, over the past five years, the Momentum 2019 claim pay-outs were the highest to date.
Painting an interesting picture, Momentum paid out R3.3 billion in death claims, with the largest death claim being R27 million – the cause of death in this case was cancer of the colon. Momentum paid out R695 million in critical illness claims, with the largest critical illness claim being R8 million, R98 million in income protection claims, with the largest income disability claim R2 million, and R499 million in disability claims, with the largest disability claim being R16 million.
Death claims
The age group for most death claim pay-outs were for 60 years and older. For pay-outs, 30% was for women, with cancer (42%) being the main cause of claims for women. Pay-outs for men raked in at 70% with cardiovascular disease (31%) being the main cause of claims for men. The oldest claimant was a 104-year-old male.
With an alarming increase of 65% in the number of suicide claims, male suicides were the largest contributor (88%) to suicide claims and also the main cause for unnatural death claims during 2019. During 2019, Momentum paid 80 terminal illness claims, 53% more than in 2018, to the amount of R187 million. Cancer was the primary cause for most of these claims.
Critical illness claims
Most critical illness claims were paid to clients 40 years of age and older. For pay-outs, 41% was for women, with breast cancer (50%) being the main cause of claims for women. The highest proportion of breast cancer claims was for Stage 1. Pay-outs for men raked in at 59% with prostate cancer (39%) being the main cause of claims for men. Most of the prostate cancer claims were for Stage 2.
The youngest adult to claim on their critical illness benefit was a 22-year-old male who required brain surgery. The largest amount paid for a single critical illness claim was R8 million. The cause of the claim was rheumatoid arthritis.
Momentum paid a total of 41 critical illness claims for 27 children. The ages of the critical illness claims for children ranged from three months old to 16 years old. Leukemia was the leading cause for child related cancer claims.
Lump sum disability claims
Most disability claims were paid to clients in the age group 50 to 59 years. For payouts, 38% was for women, with cancer (26%) being the main cause of claims. Pay-outs for men raked in at 62%, with the main cause of claims being musculoskeletal (27%). The primary reasons for musculoskeletal claims relating to men were for serious injuries to the spine or degenerative diseases of the spine.
The youngest client to receive a disability claim pay-out was a 25 year-old male and the claim was paid for epilepsy. The largest amount paid for a single disability claim was R16 million. The cause of this claim was psychiatric in nature and was paid for a major depressive disorder.
Income protection claims
Most income protection claims were paid to clients in the age group 40 to 49 years.
The main cause for claims relating to both men (61%) and women (39%) were musculoskeletal related.
The youngest client to benefit from a claim pay-out on income protection was a 23 year old male. The largest amount paid for an income protection claim was R167 299 per month. The cause of this claim was psychiatric in nature and was paid for major depression.
Interestingly, most claims for income protection for women occurred between the ages of 40 and 49. The main claim cause for women, in this age band, relate to mental illnesses such as major depression and anxiety.
Lockdown, trends and claims
“Our lockdown experience to date is that we paid about R150 million in claims (death, funeral and income protection). Seventy five percent of the death claims were for males. The average age of those who died was 65, the youngest person thus far who died was 32,” said George Kolbe, Head of Marketing for Momentum Retail Life Insurance.
“The death number is self-explanatory as the infection rate reached its peak (and we typically see the deaths slightly later) and older lives were more affected. We also saw a significant reduction in the most severe levels of lockdown on unnatural death claims like motor vehicle accidents (MVA), suicides and murders. MVA's have subsequently increased again but is not at the levels we experienced before lockdown potentially because a lot of people are still working at home. Murders and suicides have unfortunately started to increase again, as people start moving around more again and the economic realities hit home,” said Kolbe.
“You can see critical illness claims declining – related to the fact that people avoided going to hospital and doctors – so they didn’t get diagnosed - we might see spikes later,” added Kolbe.
“The nature of income protection claims have changed since the start of the pandemic and although we have seen a reduction in new COVID-19 related income protection claims recently, the complexity has increased due to factors like "long haulers"; those experiencing long term implications from contracting COVID-19,” continued Kolbe.
“Retrenchment claims have increased dramatically – we are seeing the reality of those job losses coming through in our retrenchment benefit pay-outs,” stated Kolbe.
Complications associated with COVID-19
“The future impact of COVID-19 on critical illness claims and disability claims is still uncertain, but we have identified a number of body systems where we could expect future complications and potential claims especially on the critical illness and other living benefits, for example renal e.g. kidney failure, pulmonary e.g. pulmonary embolisms, cardiac e.g. heart attacks and neurological e.g. strokes,” said Jenny Ingram, Head of Product Development for Momentum Retail Life Insurance.
“In terms of our expectations of the impact of COVID-19 on future claims, we currently expect the following: we have already experienced an increase in death claims as more people were infected and lockdown restrictions have been relaxed, but the reality is that more people are still being infected and some of those that are currently infected might take a turn for the worse,” said Ingram.
“We have experienced more claims on income protection benefits, especially those with the shorter waiting periods. For this line, as well as lump sum disability, we expect the impacts to last in the years to come since economic downturns normally translate into an increase in these claims. Critical illness claims are expected to increase as some of the longer-term impacts become known, but also since people didn’t go for medical treatments during lockdown. So, we might see an increase in the higher severity types of claims as a result,” added Ingram.
“We expect an exponential increase in retrenchment related claims in the months to come, and for the impact to be severe for even years to come,” stated Ingram.
“We can already see that there will be a significant impact on claims, there are still many unknowns as well, for example, the impact of non-medical factors like economic hardship on future claims. It is, to a large extent, uncertain what the long term consequences are going to be, but we are ready to react to those changes,” concluded Ingram.
Writer’s Thoughts:
These insights provide insurers and financial advisers with the necessary information to plan ahead in terms of servicing their client base, designing new products and getting new business. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.
